Is there a geographic limit specified in the Collateral Assignment of Lease for Aw?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
another Papa Ray's Pizza Restaurant franchise or operate itself or through an affiliate any other Papa Ray's Pizza Restaurant within the protected area described in Exhibit 1 ("Protected Area"). The Protected Area granted to you will be a certain mile radius from the Premises identified in Exhibit 1. The minimum radius that you will be granted is three (3) miles from the Premises. The criteria for determining the boundaries of the Protected Area include the population density, demographics, the amount of existing competition in the market, major and/or restricting topographical features which clearly define contiguous areas, and/or other factors we deem relevant to the operation of a Papa Ray's Pizza Restaurant. As a result of these considerations, the size of Protected Areas granted to franchisees may vary. Notwithstanding the foregoing, in the event the location of the Premises is within a limited use facility, your Protected Area shall be limited to the limited use facility (as defined below) in which your Papa Ray's Pizza Restaurant is located.
- 2.4 Our Reservation of Rights. We have the right to grant outside of the Protected Area such other Papa Ray's Pizza Restaurant businesses and franchises as we, in our sole and exclusive discretion, deem appropriate. We and any affiliates reserve the right, both within and outside of the Protected Area to:
- (a) grant a Papa Ray's Pizza Restaurant franchise or operate ourselves or through an affiliate a Papa Ray's Pizza Restaurant located within a limited use facility. A limited use facility includes those located within airports, railroad stations or other transportation facilities; stadiums, racetracks or other sport facilities; enclosed shopping centers; casinos; theaters, auditoriums, amusement parks or other entertainment facilities; military bases; and college campuses; and similar types of captive locations;
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
Based on the 2025 FDD, the Collateral Assignment of Lease for Aw does not specify a geographic limit. However, the franchise agreement outlines a Protected Area, which is a certain mile radius from the franchise location, as detailed in Exhibit 1 of the Franchise Agreement. The minimum radius granted is three miles from the premises, but the actual size may vary based on factors like population density, competition, and topographical features.
Aw franchisees are generally prohibited from providing delivery or catering services outside their Protected Area without prior written consent from Aw. Even with consent, such services cannot be provided in another franchisee's Protected Area. This restriction ensures that each franchisee has a defined territory to operate within, minimizing direct competition between Aw locations.
While the Collateral Assignment of Lease itself doesn't contain geographic limits, the franchise agreement includes provisions that effectively create geographic boundaries for operational purposes. A prospective franchisee should carefully review Exhibit 1 and related sections of the franchise agreement to understand the specific terms and conditions of the Protected Area and how it may impact their business operations.